<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20449
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended March 31, 1999
--------------
Commission File number No. 0-14905
-----------
AMERICAN INTERNATIONAL PETROLEUM CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 13-3130236
- ------------------------------- ----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
444 MADISON AVENUE, NEW YORK, NEW YORK 10022
- -------------------------------------------------- ----------------------
(Address of principal executive offices) (Zip Code)
(212) 688-3333
--------------------------------------------------
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes __X__ No ___
The number of shares outstanding of the registrant's Common Stock, $.08 par
value, as of May 5, 1998 is 66,784,943 shares.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
--------------------
AMERICAN INTERNATIONAL PETROLEUM CORPORATION AND SUBSIDIARIES
-------------------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
---------------- -----------------
<S> <C> <C>
Assets
------
Current assets:
Cash and cash equivalents $ 319,510 $ 376,745
Accounts and notes receivable, net 936,771 548,442
Inventory 1,575,005 1,554,694
Deferred financing costs 311,823 8,563
Prepaid expenses 633,017 829,654
---------------- -----------------
Total current assets 3,776,126 3,318,098
---------------- -----------------
Property, plant and equipment:
Unevaluated oil and gas property 24,616,047 23,438,886
Refinery property and equipment 37,871,870 36,935,705
Other 789,588 626,910
---------------- -----------------
63,277,505 61,001,501
Less - accumulated depreciation
and amortization (5,039,313) (4,707,103)
---------------- -----------------
Net property, plant and equipment 58,238,192 56,294,398
Notes receivable, less current portion 1,151,824 1,118,200
Other long-term assets, net 48,758 130,638
---------------- -----------------
Total assets $ 63,214,900 $ 60,861,334
================ =================
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Notes payable $ 2,406,747 $ 1,992,200
Accounts payable 2,562,595 4,081,557
Accrued liabilities 1,002,335 2,146,449
---------------- -----------------
Total current liabilities 5,971,677 8,220,206
Long-term debt 10,451,229 6,110,961
---------------- -----------------
Total liabilities 16,422,906 14,331,167
---------------- -----------------
Stockholders' equity:
Preferred stock, par value $0.01, 7,000,000 shares
authorized, none issued
Common stock, par value $.08, 100,000,000 shares
authorized, 66,310,382 and 65,992,328 shares issued
outstanding at March 31, 1999 and December 31, 1998,
respectively. 5,304,830 5,279,385
Additional paid-in capital 132,985,058 129,711,531
Accumulated deficit (91,497,894) (88,460,749)
---------------- -----------------
Total stockholders' equity 46,791,994 46,530,167
---------------- -----------------
Total liabilities and stockholders' equity $ 63,214,900 $ 60,861,334
================ =================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE>
AMERICAN INTERNATIONAL PETROLEUM CORPORATION AND SUBSIDIARIES
-------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
FOR THE THREE MONTHS ENDED MARCH 31,
------------------------------------
(Unaudited)
1999 1998
---------- ---------
Revenues:
Refinery operating revenues $ 1,863,506 $ 437,620
Other 41,382 68,425
----------- ---------
Total revenues 1,904,888 506,045
----------- ---------
Expenses:
Costs of goods sold - refinery 1,633,491 303,148
General and administrative 1,584,163 818,883
Depreciation and amortization 332,210 154,965
Interest 1,392,169 76,400
----------- ---------
Total expenses 4,942,033 1,353,396
----------- ---------
Net loss $(3,037,145) $ (847,351)
=========== ==========
Net loss per share of common stock $ (0.05) $ (0.02)
=========== ==========
Weighted-average number of shares
of common stock outstanding 66,059,813 48,694,657
=========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
AMERICAN INTERNATIONAL PETROLEUM CORPORATION AND SUBSIDIARIES
-------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
FOR THE THREE MONTHS ENDED MARCH 31,
------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
----------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(3,037,145) $ (847,351)
Adjustments to reconcile net loss to net
cash provided (used) by operating activities:
Depreciation, amortization and accretion of
discount on debt 678,350 154,965
Accretion of premium on notes receivable (12,651) (50,150)
Non-cash provision for services 131,251 196,900
Changes in assets and liabilities:
Accounts and notes receivable (388,329) 1,244,652
Inventory (20,311) (1,894,247)
Prepaid and other (30,986) 987,398
Accounts payable and accrued liabilities (2,580,270) 645,864
---------- ----------
Net cash provided by (used in) operating activities (5,260,091) 438,031
---------- ----------
Cash flows from investing activities:
Additions to oil and gas properties (854,878) (1,227,556)
Additions to refinery property and equipment (673,162) (3,053,335)
Other (183,651) (60,796)
---------- ----------
Net cash used in investing activities (1,711,691) (4,341,687)
---------- ----------
Cash flows from financing activities:
Net increase in notes payable 414,547 -
Proceeds from long-term debt 11,800,000 -
Repayments of long-term debt (5,300,000) -
Proceeds from exercise of stock warrants
and options - 408,319
---------- ----------
Net cash provided by financing activities 6,914,547 408,319
---------- ----------
Net increase (decrease) in cash and
cash equivalents (57,235) (3,495,337)
Cash and cash equivalents at beginning of year 376,745 3,721,350
---------- ----------
Cash and cash equivalents at end of year $ 319,510 $ 226,013
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
AMERICAN INTERNATIONAL PETROLEUM CORPORATION AND SUBSIDIARIES
-------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
---------------------------------------------------------
<TABLE>
<CAPTION>
Common stock Additional
--------------------------- paid-in Accumulated
Shares Amount capital deficit Total
---------- ----------- ------------ -------------- ---------
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1999 65,992,328 $ 5,279,385 $ 129,711,531 $ (88,460,749) $ 46,530,167
Issuance of stock in lieu of current
liabilities 153,054 12,245 91,832 - 104,077
Issuance of stock and options for services 125,000 10,000 121,251 - 131,251
Issuance of stock for refinery property
and equipment 40,000 3,200 34,300 - 37,500
Issuance of stock options and warrants - - 1,261,439 - 1,261,439
Imputed interest on debentures convertible
at a discount to market - - 1,764,705 - 1,764,705
Net loss for the year - - - (3,037,145) (3,037,145)
---------- ------------ ------------- ------------- ------------
Balance, March 31, 1999 66,310,382 $ 5,304,830 $ 132,985,058 $ (91,497,894) $ 46,791,994
========== =========== ============= ============= ============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements
5
<PAGE>
AMERICAN INTERNATIONAL PETROLEUM CORPORATION
AND SUBSIDIARIES
----------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1999
1. Statement of Information Furnished
----------------------------------
The accompanying unaudited condensed consolidated financial statements of
American International Petroleum Corporation and Subsidiaries (the "Company")
have been prepared in accordance with Form 10-Q instructions and in the opinion
of management contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of March 31,
1999, the results of operations for the three month period ended March 31, 1999
and 1998 and cash flows for the three months ended March 31, 1999 and 1998.
These results have been determined on the basis of generally accepted accounting
principles and practices applied consistently with those used in the preparation
of the Company's 1998 Annual Report on Form 10-K.
Certain information and footnote disclosures normally included in financial
statements presented in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that the accompanying unaudited
consolidated financial statements should be read in conjunction with the audited
consolidated financial statements and notes thereto included in the Company's
1998 Annual Report on Form 10-K.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
-----------------------------------------------------------------------
of Operations
-------------
Results of Operations
Although the Company has two major segments of its business, refining and oil
and gas exploration and development, it has had no oil and gas production
operations since the first quarter of 1997 when it sold its South American
wholly-owned oil and gas subsidiaries. Since this sale, the Company's oil and
gas activities have included, but were not limited to, geological and
geophysical acquisition, reprocessing and/or analysis of data, acquisition of
additional licenses or projects, drilling, and marketing analysis and
negotiation. The Company has yet to implement oil and/or gas production
operations in Kazakstan or elsewhere. At that point in time, the Company will
include a more detailed discussion of the oil and gas exploration and
development segment of its business.
For the Three Months Ended March 31, 1999 as compared to the Three Months Ended
- -------------------------------------------------------------------------------
March 31, 1998
- --------------
Refinery Operations:
During the first quarter of 1999, the Company recorded revenues of approximately
$1,864,000 compared to $438,000 during the same period in 1998. The Company's
Lake Charles, Louisiana refinery (the "Refinery") was going through a
construction and operational testing period throughout the first quarter 1998
and had minimal sales as a result. During the entire first of quarter of 1999,
all major construction and testing had been completed and, except for the
relatively low level of production during this off-season quarter, the Company's
asphalt operations proceeded in a more normal course of business. The Company
did not acquire any crude oil during the first
6
<PAGE>
quarter of 1999, choosing instead to purchase cheaper wholesale asphalt for
blending with additives to produce higher-margin, technologically-advanced
polymerized performance grade ("PG") asphalt products. Consequently, it operated
its crude unit only during a portion of January 1999 and, and a result, had
minimal light-end sales during the period, which were processed from crude oil
feedstocks remaining from 1998 inventories. Asphalt sales during the first
quarter of 1999 accounted for approximately $1,450,000, or 78% of sales, with
sales of light-end refined products, such as vacuum gas oil, naphtha and diesel,
accounting for the remainder. Cost of sales for asphalt and light-end products
approximated $1,160,000 and $473,000, respectively.
There were no sales at the Company's St. Marks, Florida refinery during the
first quarter of 1999, primarily due to the high cost of transportation of
products from Lake Charles, which made operations at St. Marks during this
period uneconomical. However, this problem should be minimized or negated in the
future with the implementation of the Company's asphalt barge operations in the
second quarter this year.
Approximately two-thirds of the Company's asphalt sales during the first quarter
of 1999 were PG-grade products.
The Company's strategy is to emphasize the production and marketing of
high-margin PG-grade products during 1999. The low-margin segment of the
business, i.e. wholesale asphalt, conventional asphalts, and light ends, will be
kept to a minimum. While this strategy could reduce total revenues from
anticipated levels in 1999, it is expected to produce higher operating cash
income during the year. However, total sales, as well as margins, should be
positively impacted by increased demand for asphalt in 1999. For example,
wholesale asphalt prices have increased 40% since January 1999 but, even at this
level, margins for wholesale asphalt are still far below those of PG-grade
products.
The U.S. Government's new Transportation and Equity Act ("TEA"), anticipated
shortages of asphalt in the northern states, and reduced supplies of heavy crude
by OPEC and other producing countries, are expected to cause demand for asphalt
to grow significantly in 1999, particularly for the technologically-advanced
polymer products. TEA authorizes $173 billion through 2003 for construction and
maintenance of federal highways, of which $32 billion is allocated to the states
where the Company does business, a 61% increase over the prior spending bill.
Even though the first quarter is typically slow with little asphalt demand, the
Company had accumulated approximately $6.3 million in sales backlog as of April
30, 1999, over double the amount accumulated at this date last year.
7
<PAGE>
Other Revenue:
- -------------
Other revenues decreased approximately $27,000, or 40%, during the current
quarter compared to the first quarter of 1998, primarily attributable to less
interest income accrued from certain notes receivable, which were written off at
year-end 1998.
General and administrative:
- ---------------------------
General and Administrative expenses, ("G&A") increased approximately $765,000
compared to the same period during 1998, primarily due to financing costs of
$133,000, an increase of $265,000 in consulting expenses, a $84,000 increase in
property taxes, and a $65,000 increase in property insurance expense in the
first quarter of 1999 compared to the same period in 1998. In addition, the
Company capitalized $391,000 of G&A in the first quarter of 1998, in connection
with refurbishment of the Refinery, and none in 1999. These increases were
partially offset by lower salaries and professional and legal fees in 1999 of
$141,000 and $74,000, respectively.
Depreciation and Amortization increased approximately $177,000 during the
current period compared to the same period last year due to the completion of
the refinery construction and placing of new depreciable assets into service
during the last quarter of 1998.
Interest expense increased by approximately $1,316,000 to $1,392,000 during the
first quarter of 1999. Non-cash charges totaling $894,000 were recorded for
financing costs related to the Company's convertible debentures outstanding
during the current quarter. The Company capitalized $548,000 of these financing
costs to its oil and gas and refinery projects during the current quarter
compared to approximately $1,620,000 of interest capitalized in the first
quarter of 1998.
Liquidity and Capital Resources
- -------------------------------
During the first quarter ended March 31, 1999, the Company used a net amount of
approximately $5,260,000 for operations, which reflects approximately $1,012,000
in non-cash provisions, including $444,000 in loan costs, issuance of stock in
lieu of cash payments of $236,000 and depreciation and amortization of $332,000.
Approximately $20,000 was used during the period to increase product and
feedstock inventory and $3,000,000 was used to decrease accounts payable and
accrued liabilities and to increase current assets other than cash. Additional
uses of funds during the quarter included additions to oil and gas properties
and Refinery property and equipment of $855,000 and $673,000, respectively. Cash
for operations was provided, in part, by proceeds from long and short-term debt
of approximately $12,215,000, partially offset by cash used to repay long-term
debt of $5,300,000.
8
<PAGE>
In January and February 1999, the Company borrowed an aggregate of $11.8
million, $10 million of which is outstanding convertible debt due and payable in
February 2004. A portion of the proceeds was used to reduce $3.5 million
principal balance from the Company's outstanding 14% convertible debentures and
a significant amount of current liabilities, including $1.3 million in excise
tax and related interest due to the IRS, discussed below, and an aggregate of
approximately $3 million in accounts payable at the Refinery and in Kazakstan.
Since December 1998, the Company has also arranged for an aggregate of almost $5
million in non-equity financing, secured by its accounts receivable, inventory,
asphalt barge, and St. Marks facility, which it utilized to acquire feedstock,
refurbish equipment and for other working capital needs.
During 1998, the Company reached an agreement to settle an ongoing dispute with
the IRS, which called for the Company to pay $646,633 in excise taxes, plus
interest incurred for the applicable periods dating back to 1989. As discussed
above, in February 1999, the Company paid all remaining tax and interest due
under this settlement of approximately $1.3 million.
During 1998, the Refinery was operated on a limited basis (less than 10%
capacity) while extensive testing of equipment, various types of crude oil
feedstocks, and asphaltic blends took place. These processes severely limited
the Company's operating margins during the 1998 asphalt season. However, during
the first quarter of 1999, the asphalt division was operated without the burden
of construction and testing processes and consequently, its margins improved
significantly, even though it operated at very low levels during the off-season
first quarter, typically a slow period in the asphalt industry. The Company
expects its margins and cash flow to continue to be stronger for the second
quarter of 1999 than in the same period last year.
As mentioned above, as of April 30, 1999, the Company had a backlog of asphalt
sales of approximately $6.3 million, over twice the amount accumulated at this
time last year. The Company expects to operate the crude unit on a spot basis
during 1999. Coupled with currently-available sources of non-equity financing,
the Company would expect sufficient positive operating margins to support most
of the Refinery's operational requirements in 1999. As operations at the
Refinery expand during 1999, the Company plans, to the extent possible, to
prudently obtain bank or other conventional, non-equity financing to replace its
existing convertible debt and provide the supplemental funds necessary to
support all of its domestic operations and minimal work program in Kazakstan.
The Company recently retained a major investment banking firm to assist it in
locating a joint venture partner and financing for its Kazakstan concessions.
Depending on the timing and success of this
9
<PAGE>
process, the Company intends to be very conservative with its expenditures
overseas during 1999. As of April 1999, the Company's existing working capital
was insufficient to provide it with all of the capital it may require to
complete its minimum work program for 1999. However, the Company believes it can
obtain a deferral of these minimum requirements. If it is unable to obtain the
necessary financing to meet these requirements or if it is unable to obtain a
deferral thereof, certain projects, expansions and other activities in Kazakstan
could be delayed or cancelled.
The Company is seeking high yield debt financing to supplement it's cash flow
from operations during 1999. If the Company is unable to derive the necessary
working capital from the Refinery, St. Marks and AIM, or from a joint venture
partner in Kazakstan, to support its operations during 1999, or obtain the
necessary financing to adequately supplement or provide all of its funding
needs, its ability to continue operations at current levels could be materially
and adversely effected.
Y2K Issues
- ----------
The Company has been addressing the potential impact of the nearly universal
practice in the computer industry of using two digits rather than four to
designate the calendar year relating to the year 2000, ("Y2K") and has engaged
outside computer consultants to assist it with its evaluation. The Company is
not aware of any circumstances in which the failure of a supplier or customer to
deal successfully with the issue would have a material impact on the Company's
ability to continue to operate on an uninterrupted basis. The Company has
assessed its internal programs and hardware and concluded that all of its
systems are, or will be, in compliance prior to year-end. Should the Company
experience any such problems with regards to its internal systems, it has
estimated that in a worst-case scenario the aggregate cost to mitigate any
related problems would not exceed $75,000.
PART II. OTHER INFORMATION
Item 2. Changes in Securities
On January 21, 1999, the Company issued a six-month $1.8 million bridge note in
a private placement to a single "accredited investor", (the "Investor"), within
the meaning of Rule 501(a) under the Securities Act of 1933, as amended (the
"Securities Act"). In connection with the issuance of this note, the Company
issued a five-year warrant to purchase 200,000 shares of the Company's common
stock with an exercise price of $1.06 per share. The bridge note and warrant
were issued pursuant to the exemption from the registration requirements of the
Securities Act provided by Section 4(2) of the Securities Act and Rule 506 of
Regulation D.
10
<PAGE>
On February 18, 1999, the Company issued and sold $10,000,000 principal amount
of its 5% convertible secured debentures due 2004 (the "Debenture") and warrant
to purchase 2,000,000 shares of common stock at an exercise price of $2.58 per
share to an institutional investor for a purchase price of $10,000,000. The
Debenture and warrant were issued pursuant to the exemption from the
registration requirements of the Securities Act provided by Section 4(2) of the
Securities Act and Rule 506 of Regulation D. The Debenture bears interest at the
rate of 5% per annum, payable on the last day of each calendar quarter,
commencing March 31, 1999, and is payable on February 18, 2004, or earlier upon
acceleration following the occurrence of an event of default.
The Debenture is convertible into shares of the Company's common stock, at the
option of the holder thereof, commencing August 17, 1999, subject to the
limitations stated below. The Conversion price is equal to the lesser of $1.288
and 85% of the average of the lowest three daily weighted average sales prices
of the common stock for the 20 trading days prior to the date upon which the
holder gives notice of conversion. The right of conversion is subject the
following limitations:
1. The holder may convert the Debenture prior to August 17, 1999 if the
closing bid price of the common stock is at least $1.55 per share for
five consecutive trading days, except that the number of shares
converted and sold on any one day prior to August 17, 1999 may not
exceed 10% of the daily sales volume of the common stock.
2. The number of shares of common stock that the holder may acquire upon
conversion of the Debentures, together with shares beneficially owned
by the holder and its affiliates, may not exceed 4.9% of the total
outstanding shares of common stock. The holder may change this
limitation upon 61 days prior notice to the Company or immediately
following a change in control of the Company.
3. The number of shares of common stock that the holder may acquire upon
conversion of the Debenture may not exceed 19.9% of the shares
outstanding on February 18, 1999, the date upon which the convertible
debentures were issued, unless and until stockholders approve the
issuance upon conversion of more than 19.9%, as required by the rules
of The Nasdaq Stock Market, Inc.
On March 15, 1999, the Company issued 40,000 restricted shares of its common
stock to a consultant as partial consideration for services rendered on behalf
of the Company. These shares were issued pursuant to the exemption from
registration requirements of the Securities Act provided by Section 4(2) of the
Securities Act.
11
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
4.1 Convertible Debenture Purchase Agreement dated
February 11, 1999. (1)
4.2 Form of 5% Convertible Secured Debenture, as
amended. (1)
4.3 Form of Warrant. (1)
4.4 Form of Registration Rights Agreement. (1)
4.5 Form of Mortgage and Security Agreement. (1)
27.1 Financial Data Schedule.
(1) Incorporated herein by reference to the Registrant's Form 8K/A
dated April 26, 1999.
(b) Reports on Form 8-K
Form 8-K dated March 1, 1999, as amended April 26, 1999,
reporting the sale of $10 million principal amount of 5%
Convertible Secured Debentures due February 18, 2004.
12
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: May 14, 1999
AMERICAN INTERNATIONAL
PETROLEUM CORPORATION
By /s/ Denis J. Fitzpatrick
-------------------------
Denis J. Fitzpatrick
Chief Financial Officer
13
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
27.1 Financial Data Schedule.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) ________
________________________________________________________________________________
________________________________________________________________________________
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH (B) ______________________
________________________________________________________________________________
________________________________________________________________________________
</LEGEND>
<CIK> 0000799119
<NAME> A.I.P.C.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 319,510
<SECURITIES> 0
<RECEIVABLES> 936,771
<ALLOWANCES> 0
<INVENTORY> 1,575,005
<CURRENT-ASSETS> 3,776,126
<PP&E> 63,277,505
<DEPRECIATION> (5,039,313)
<TOTAL-ASSETS> 63,214,900
<CURRENT-LIABILITIES> 5,971,677
<BONDS> 10,451,229
0
0
<COMMON> 5,304,830
<OTHER-SE> 41,487,134
<TOTAL-LIABILITY-AND-EQUITY> 63,214,900
<SALES> 1,863,506
<TOTAL-REVENUES> 1,904,888
<CGS> 1,633,491
<TOTAL-COSTS> 1,633,491
<OTHER-EXPENSES> 1,916,373
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,392,169
<INCOME-PRETAX> (3,037,145)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,037,145)
<EPS-PRIMARY> (0.5)
<EPS-DILUTED> 0
</TABLE>
